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The Following Statements Describe Two Types of HMOs: the Elm

question 165

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The following statements describe two types of HMOs: The Elm HMO requires its members to select a PCP but allows the members to go to any other provider on its panel without a referral from the PCP. The Treble HMO does not require its members to select a PCP. Treble allows its members to go to any doctor, healthcare professional, or facility that is on its panel without a referral from a primary care doctor. However, care outside of Treble's network is not reimbursed unless the provider obtains advance approval from the HMO. Both HMOs use delegation to transfer certain functions to other organizations. Following the guidelines established by the NCQA, Elm delegated its credentialing activities to the Newnan Group, and the agreement between Elm and Newnan lists the responsibilities of both parties under the agreement. Treble delegated utilization management (UM) to an IPA. The IPA then transferred the authority for case management to the Quest Group, an organization that specializes in case management. Both HMOs also offer pharmacy benefits. Elm calculates its drug costs according to a pricing system that requires establishing a purchasing profile for each pharmacy and basing reimbursement on the profile. Treble and the Manor Pharmaceutical Group have an arrangement that requires the use of a typical maximum allowable cost (MAC) pricing system to calculate generic drug costs under Treble's pharmacy program. The following statements describe generic drugs prescribed for Treble plan members who are covered by Treble's pharmacy benefits: The MAC list for Drug A specifies a cost of 12 cents per tablet, but Manor pays 14 cents per tablet for this drug. The MAC list for Drug B specifies a cost of 7 cents per tablet, but Manor pays 5 cents per tablet for this drug. To calculate its drug costs, Elm uses a pricing system known as:

Definitions:

APICS

APICS stands for the Association for Supply Chain Management, a professional association for supply chain management and logistics professionals, offering certification programs and training.

PMI

The Project Management Institute, a professional organization for project management providing best practices, certifications, and education.

Fiscal Year-End

The completion of a one-year, or 12-month, accounting period that businesses use for financial reporting and budgeting.

Critical Decisions

Decisions that have a significant impact on the outcome or success of a particular process, project, or organization.